|
|
|
CONCURRENT RESOLUTION
|
|
WHEREAS, The White House has raised the prospect of a |
|
substantial tax on imports from Mexico, but economists and business |
|
leaders have warned that such a measure would have a severe negative |
|
impact; and |
|
WHEREAS, Although the imposition of tariffs is intended to |
|
make American companies more competitive, the benefits are both |
|
limited and outweighed by numerous and substantial risks, according |
|
to economists across the political spectrum; this is the case |
|
whether tariffs are imposed directly or through a border-adjusted |
|
tax that subsidizes exports; and |
|
WHEREAS, Any border tax would hurt U.S. consumers; tariffs |
|
are effectively paid by the purchasers of goods, and as imported |
|
goods became more expensive, so would any domestic goods that are |
|
reasonable substitutes; in turn, the cost of living would soar, |
|
affecting lower-income Americans the most, as they spend a higher |
|
percentage of their income on goods, especially those produced |
|
abroad; and |
|
WHEREAS, Costs would also rise for U.S. manufacturers of |
|
products that incorporate materials made in Mexico and subject to a |
|
border tax; the enactment of tariffs could cause delays or price |
|
spikes that spiral through the economy and interrupt complex, |
|
time-sensitive supply chains; any slowdown could mean layoffs among |
|
producers and damage to the broader U.S. economy; and |
|
WHEREAS, Jobs would also be lost because of the inevitable |
|
decline in the value of the Mexican peso; the loss of purchasing |
|
power by our trading partner would lead to a drop in U.S. exports, |
|
thereby putting Americans out of work; this would cause havoc in |
|
both the Mexican and U.S. economies, according to former U.S. |
|
Treasury Secretary Lawrence Summers, now a Harvard University |
|
economist, who said that "it would be one of the best things that |
|
ever happened for Asian and European competitors"; and |
|
WHEREAS, If the United States imposes a tariff, Mexico will |
|
no doubt retaliate, resulting in a pernicious trade war; most |
|
experts believe that this would deliver a significant blow to the |
|
economy, and Peter Petri, a professor of international finance at |
|
Brandeis University, has suggested it could take years to rebuild |
|
supply chains disrupted by such conflict; Simon Johnson, a |
|
professor of entrepreneurship at MIT's Sloan School of Management, |
|
has cautioned that the impact would be "much worse than a |
|
recession," and more on the scale of a full-blown financial crisis; |
|
Princeton University historian Sean Wilentz has offered the example |
|
of the Smoot-Hawley Tariff, signed into law by President Herbert |
|
Hoover in 1930, which sparked a trade war that devastated the global |
|
economy; and |
|
WHEREAS, A border tax would be particularly crushing in |
|
Texas; Mexico is far and away our state's top trading partner, as |
|
the Texas Association of Business observed in speaking out against |
|
an import tariff; in 2015, trade between Texas and Mexico amounted |
|
to over $176.5 billion, representing more than a third of our total |
|
trade, with a surplus of $8 billion on our side; as of 2014, almost |
|
400,000 Texas jobs depended on that trade, according to the Wilson |
|
Center Mexico Institute; some Texas businesses have already |
|
suffered due to the mere threat of a trade war, which has driven the |
|
peso to a near all-time low and weakened the purchasing power of |
|
potential customers from Mexico; the effect has been particularly |
|
troubling in such border communities as El Paso, where one in every |
|
four jobs relies on cross-border trade; and |
|
WHEREAS, In 2015, Texas imported $84 billion from Mexico, and |
|
with a 20 percent tariff, businesses and consumers would have paid |
|
$16.8 billion more for the same goods and services; residents |
|
particularly depend on the availability of agricultural products |
|
from Mexico, and a border tax would drive up the cost of healthful |
|
fruits and vegetables; moreover, many large-scale agricultural |
|
concerns in Mexico are owned by American companies; and |
|
WHEREAS, Trade has historically been an engine of prosperity, |
|
benefiting consumers and businesses alike; Mexico is the nation's |
|
third-largest trading partner, and a tariff or border-adjusted tax |
|
on imports would drastically suppress commerce, to the tremendous |
|
detriment of our state and nation; now, therefore, be it |
|
RESOLVED, That the 85th Legislature of the State of Texas |
|
hereby respectfully urge the United States Congress and the United |
|
States president to reject the imposition of an import tax or border |
|
adjustment tax on trade with Mexico; and, be it further |
|
RESOLVED, That the Texas secretary of state forward official |
|
copies of this resolution to the president of the United States, to |
|
the president of the Senate and the speaker of the House of |
|
Representatives of the United States Congress, and to all the |
|
members of the Texas delegation to Congress with the request that |
|
this resolution be entered in the Congressional Record as a |
|
memorial to the Congress of the United States of America. |